The Delhi Bench of Income Tax Appellate Tribunal (ITAT) comprising of M. Balaganesh (Accountant Member) and Anubhav Sharma (Judicial Member) has ruled that the payments made to doctors shall be covered by TDS provisions under Section 194J and not Section 192 of the Income Tax Act.
Section 194J of the Income Tax Act is pertinent to the fees for professional or technical services. Section 194J in the Income Tax Act, 1961 forms that any entity, excluding individuals or Hindu Undivided families, making payments to a resident for professional or technical services should deduct TDS at either 10% or 2% of the payment credited. It should be laid on the type of services generated.
According to section 192, the obligation of delivering accurate and entire particulars of perquisites or profits instead of salary furnished to an employee is put on the person accountable for paying such income i.e., the person liable for deducting tax at source.
The company of taxpayer is in the business of establishing, maintaining, and running Hospital and Multispeciality healthcare facilities. Under section 133A a TDS Survey was performed in the business premises of the taxpayer company dated 10.8.2011 wherein it was happened via the Survey Team that the taxpayer had been doing payment of consultancy charges to Doctors. These payments were subjected to deduction of tax at source by the taxpayer as per section 194J of the Act.
The Survey Team and the AO rule that these payments shall need to be deemed as salary and as per that the tax to be deducted at source is to be in terms of section 192. The proceedings under section 201(1) / 201(1A) were initiated on the taxpayer and a differential TDS rate was asked to be collected via the taxpayer by deeming it as “assessee in default” under section 201(1) and consequential interest under section 201(1A).
AO, the facts in Asst Years 2010-11, 2011-12, and 2012-13 were seen to be the same, and similar treatment was delivered through him for the earlier years. He uniformed with the practice treated the assessee as an “assessee in default” and charged tax and interest on the assessee for the year under consideration.
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CIT(A) noted that the identical problem is been determined in taxpayers’ favour via the Tribunal and ruled that the payments to doctors shall be concealed merely u/s 194J of the Income Tax Act and not under section 192 of the Income Tax Act.
The problem raised was whether treating the payment that the taxpayer made as covered under section 194J of the Income Tax Act concerning all categories of Doctors rather than Section 192 being TDS on Salary.
The passed orders by the CIT(A) have been supported by the tribunal.
| Case Title | Artemis Medicares Services Ltd Vs. ACIT (TDS) |
| Citation | ITA No. 554/Del/2016 |
| Date | 16.01.2024 |
| Assessee by | Ms. Shaily Gupta, CA Shri. Archit Kabra, CA |
| Revenue by | Shri Kanv Bali, Sr. DR |
| Delhi ITAT | Read Order |
